Huntsman sees U.S. opportunities in China

Those paying attention this presidential election season keep hearing that China represents a grave threat to America's economic future. One conclusion that Jon Huntsman Jr. hopes to leave with his Minneapolis audience this week is just how wrongheaded that thinking is.

China isn't a threat, or at least not one that can't be managed. But it sure is an opportunity.

"It's a lot of disinformation," Huntsman said of the China-bashing on the presidential campaign trail. "And it's not helpful."

Huntsman knows firsthand about presidential campaigning, as he's probably best known as a Republican presidential candidate from 2012.

He also has the kind of knowledge about China that comes from being on the ground there. The former Utah governor's most recent public service was as U.S. ambassador to China. He explained that his experience in the region stretches back decades, and included a term as ambassador to Singapore.

When he's out traveling in the United States, he said, he hears all the time that China is some sort of enemy of our country, and maybe the single biggest misconception about China he hears is that "war is inevitable."

It's certainly discouraging to hear Huntsman say that, an echo of the decades-long Cold War rivalry with the former Soviet Union. His sensible conclusion is that China is just another competitor, and it's our job to make sure it doesn't turn into an enemy.

One of those areas, with China, is growing trade.

Huntsman believes that even business owners don't fully appreciate how much the Chinese economy is changing in ways that should create opportunities. For a long time, mostly what China wanted was to grow its exports, doing what it could to keep its currency value down to make exported manufactured goods cheaper in foreign markets.

That strategy has come to the end of the road, and China has recently moved to prop up the value of its currency. The Chinese government hopes its economy comes to more closely resemble what we have here, with consumers driving economic growth.

"There's no guarantee that they can get to the promised land," Huntsman said. "They are in that journey now. And it's tough going."

As Huntsman ticked off some of the issues facing Chinese leaders, some of them would sound familiar to American political leaders, too.

China also has an income inequality problem that's far more pronounced than ours, Huntsman said, with the median income in high-income regions of China perhaps four times the household incomes in the poorest province.

That's one reason the Chinese government has been confronted with rising expectations as the Chinese people are demanding, among other things, the chance to breathe clean air. And the political party in charge remains deeply distrusted.

Even with these issues in China, however, "every city and every county and every state in America will be exporting a whole lot more to China in years to come," Huntsman said. "If we play it right, we will have a huge export boom over the next 10 years."

Businesses in Minnesota already sell a lot to China. From 2005 to 2014 it was second only to Canada as a trading partner, said Ed Dieter, deputy director of the Minnesota Trade Office.

"A lot of what we were shipping to China was … industrial machinery and electrical equipment, stuff that was going into factories to make other stuff," Dieter said. "We are seeing some shift in that. For instance, our export of medical devices was up significantly last year."

He also coaches business owners to do their homework first, citing as one example the continuing problem of having Chinese companies conclude it's easier to copy good American ideas rather than import American products.

That's one of the challenges for American companies working in China that Huntsman cited, too. Yet he also pointed out that staying away from China, perhaps out of fear, makes very little sense.

He remembers from early in his career when Japan was deeply feared in business circles as an unstoppable economic juggernaut. Those fears quickly eased as Japan's growth stalled.

"China is a different model," he said. "It has staying power. They have population, they have geography, they have natural resources. It's got a resilient system. It's going to be our challenge and our opportunity of the 21st century."